Walgreens’ Three-Year Revival Plan: Strategic Store Closures and Enhanced Healthcare Services

Strategic Review and Store Closures:
Walgreens is conducting a strategic review of its business, including the role of its retail pharmacy stores and healthcare assets. The company plans to close a significant portion of its 8,600 U.S. locations over the next three years to improve profitability.

Enhanced Healthcare Services:
Walgreens aims to grow its presence as a healthcare provider by focusing on specialty pharmacy, clinical trials, and other services. The company is also working to improve reimbursements by aligning incentives with pharmacy benefit managers (PBMs) and payers.

Digital Transformation:
Walgreens is investing in digital technologies to enhance the customer experience, including same-day delivery and a more integrated online and in-store shopping experience.

Cost-Cutting Measures:
The company is implementing cost-cutting initiatives to reduce expenses by $1 billion this year, including slashing capital expenditures by about $600 million.

Primary Care Clinics:
Walgreens is closing underperforming VillageMD primary care clinics to improve profitability but remains committed to its primary care business.

Competition and Market Challenges:
Walgreens faces significant competition from discount retailers like Walmart and Amazon, as well as challenges such as declining reimbursement rates for prescriptions and increased consumer price sensitivity.

Long-Term Strategy:
CEO Tim Wentworth emphasizes that the turnaround will not be a quick process but believes that Walgreens has a meaningful role to play in healthcare over the next 20 to 30 years.